Toronto Estate Lawyer : Hull & Hull Law Firm : Trust Mediation and Succession Planning : Serving Ontario, Ottawa, Mississauga, Hamilton

• Print
• Comments
• Trackbacks

The Court of Appeal recently rendered its decision in Madore-Ogilvie and Ogilvie v. Ogilvie Estate, 2008 ONCA 39.  One of the issues was whether the proceeds from a jointly owned life insurance policy could be included in the deceased’s estate for the purposes of satisfying a dependant’s relief claim. 

One of our previous blogs reviews the facts of the case and the appellate decision of the Divisional Court, which I will not repeat except to say that the Divisional Court reversed the application judge’s finding that the policy could be included as part of the estate, and decided that the contractual rights of the spouse to the joint policy trumped the needs of the deceased’s dependants.

Two of the minor children appealed the Divisional Court’s decision and asked that the application judge's decision be restored.  The deceased’s spouse cross-appealed. 

The Court of Appeal dismissed both the appeal and the cross-appeal, finding as follows:

-          the policy was not caught within the ambit of section 72(1)(f) of the Succession Law Reform Act;

-          the policy was not an arrangement that was made to jeopardize the maintenance of the deceased’s dependants; and

-          section 199 of the Insurance Act did not apply to the policy.

Have a good day,

Natalia

• Print
• Comments
• Trackbacks

I thought I would close off this week’s blogs with a recent decision that reviews the law on surrogate parents.

In M.D. v. L.L. a married couple wished to have a child.  Unfortunately, the wife, M.D., was unable to bear children.  So, the couple turned to a family friend, L.L., who was willing to act as a surrogate mother.  M.D. and L.L. papered the terms of their understanding in a Gestational Carriage Agreement. 

After L.L. gave birth to the child, a Statement of Live Birth had to be completed and filed with the Registrar, which statement required L.L. to place her name on the form as the “mother” of the child, notwithstanding the Agreement and the fact that M.D. and her husband were the genetic parents of the child.

M.D. and her husband sought orders declaring themselves to be the parents of the child, and declaring L.L. and her husband not to be the parents.  The Court granted the orders sought, and in so doing held that despite a statutory definition defining “mother” by reference to birth, the genetic parents were the true parents.

This decision is likely going to be the authority relied upon in surrogate parenting litigation to come.

Have a great long weekend!

Natalia

• Print
• Comments
• Trackbacks

 

In a recent Superior Court of Quebec decision a family’s patriarch, Leon, died intestate in 1968.  The main asset of his estate was his home (registered in Leon’s name) where he resided with his wife and son, Walter.  At law Leon’s wife was entitled to 1/3 of the home, and Walter was entitled to 2/3 of the home.  Following Leon’s death, his wife and son continued to live in the home and dealt with it as their own property.

 

Leon’s wife died intestate in 1983.  Her sole heir was Walter.  The home remained registered in Leon’s name, but Walter continued to live there and dealt with it as his own property.

 

Walter disappeared after 1992, and in 2004 was declared dead.  Walter’s maternal and paternal cousins began fighting over Walter’s estate.  While all the cousins agreed they were equal beneficiaries of Walter’s estate, the argument of the maternal cousins was that they were beneficiaries of his mother’s estate (including her interest in the home), since she died intestate and Walter had never formally accepted her estate.

 

After applying various provisions of the Quebec Civil Code, the Court held that Walter, by being an absentee, was deemed to have accepted his mother’s estate because an absentee can only renounce through his representative. 

 

This case reveals an interesting distinction between Quebec and Ontario legislation, the latter of which does not impose any obligation to accept or reject one’s interest in an estate.

 

Until tomorrow,

Natalia

• Print
• Comments
• Trackbacks

On December 20, 2006, the Ministry of Government Services Consumer Protection and Service Modernization Act, 2006 (Bill 152) received Royal Assent. The Act contained amendments to a number of statutes, including the Land Registration Reform Act, Land Titles Act and Registry Act, to address issues related to real estate fraud.

The Ministry recently released a Land Registration Bulletin (No. 2008-02, dated March 7, 2008), which provides information related to, among other things, new registration requirements for powers of attorney and any documents registered under the authority of a power of attorney.  These include the following:

·           A law statement will be necessary when an individual registers any document under the authority of a Power of Attorney. In these cases, a lawyer will be required to discuss the Power of Attorney with their clients and provide the requisite law statement.

·           A law statement will not be required in documents signed under the authority of a Power of Attorney given by a corporation or a bank. In those cases, the attorney will be required to make a statement that they are acting within the scope of the Power of Attorney.

·           The original signed and witnessed Power of Attorney must be scanned into the electronic registration of a Power of Attorney.

·           Most of the existing statements in an electronic Power of Attorney and Revocation of Power of Attorney document are being retired and replaced with new statements, which are particularized in the Bulletin.

Keep in mind that these changes take effect on April 7, 2008.

Have a good day,

Natalia

• Print
• Comments
• Trackbacks

Does the Court have jurisdiction to set aside a Family Law Act election, or is such an election irrevocable?

This question was recently considered in the Ontario Superior Court of Justice decision of Iasenza v. Iasenza Estate 2007 CanLII 23351.

As background, Ontario’s Family Law Act (“FLA”) allows a surviving spouse to elect to either receive benefit under the deceased’s will (or on an intestacy if there is no will), or receive an equalization of net family property under the FLA. Normally, the surviving spouse seeks information regarding each of the options, and then elects for the greater benefit.

However, information regarding the values of each option is not always forthcoming in a timely fashion. The election must be filed within 6 months of the date of death, or the surviving spouse is deemed to elect to take under the will or on an intestacy.

The Court held that it did have discretion to set aside an election made in favour of an equalization. However, the Court noted that the discretion will be exercised sparingly and only in “restrictive circumstances where the interests of justice require it and where the balance of the interests of effected parties clearly warrants it.”

In considering whether to exercise its discretion, the Court will consider:

a.                  Was the election filed as a result of a material mistake of fact or law made in good faith?

b.                  Was there any responsibility or culpability on the part of the effected parties in relation to the election?

c.                  Was the notice of intent to seek revocation of the election given in a timely way, and in particular, how long after the 6 month filing period was notice given?

d.                  Has the estate been distributed or would interested parties otherwise be adversely effected?

e.                  Does the election result in an injustice to the surviving spouse in all of the circumstances?

On the particular facts of Iasenza, the Court decided to exercise its discretion and set aside the election filed by the surviving spouse. As a result, the spouse was entitled to receive 1/3 of the estate under the will, whereas she would have received nothing under the election.

Thanks for reading.

Paul Trudelle

• Print
• Comments
• Trackbacks

In my blog yesterday, I introduced the prudent investor rule as the standard of care for trustees when investing assets that are held in a trust. Today, I will address how a trustee’s investment performance may be assessed.

Prior to July 1999, trustees were required to make investments pursuant to the “statutory legal list” provided for in the Trustee Act. This had the effect of holding trustees accountable for each particular investment, rather then the investment portfolio as a whole. The principle was further illuminated by the anti-netting rule, which stated that a trustee, who committed a breach of trust, was not entitled to set off a gain in one transaction against a loss in another. However, through recent amendments to the Trustee Act, the statutory legal list was repealed and replaced with the Prudent Investor Rule.

The Prudent Investor Rule reflects the modern portfolio approach to investments, the emphasis being on the prudence of the portfolio as a whole as opposed to each particular component. This theory is captured in Section 27(5) of the Trustee Act. Section 27(5) requires “a trustee to consider … the role that each investment plays within the overall trust portfolio”. Furthermore, under section 27(6) “a trustee is required to diversify the investments of the trust property. It appears that under the modern portfolio approach, a trustee would not be breaching the standard of care, should he or she invest a substantial amount of trust assets into a single security. As described above, section 27(6) requires that the trustee consider diversifying the portfolio, which is necessary if the Prudent Investor Rule is to be followed. To conclude my topic, tomorrow I will consider the liability of a trustee with respect to the investment of trust assets.

Thanks for reading,

Rick

• Print
• Comments
• Trackbacks

Section 131 of the Courts of Justice Act establishes the authority for the Court to award costs. Section 131 states that the Court has absolute discretion in awarding costs, subject to the provisions of an Act or the rules of court. 

Before July 2005, the Rules of Civil Procedure provided some sense of certainty to the Court’s broad discretion in awarding costs as the Rules provided a costs grid. The costs grid suggested that costs were to be determined by an hourly rate multiplied by the time spent. In 2004, the Court of Appeal in Boucher v. Public Accountants Council set forth the general principle as to the fixing of costs pursuant to Rule 57.01 and the costs grid. With respect to costs, the Court stated that the overall “objective is to fix an amount that is fair and reasonable for the unsuccessful party to pay in the particular proceeding, rather than an amount fixed by the actual costs incurred by the successful litigant”. Subsequently, in July 2005, the Rules were amended. 

The amendment to the Rules abolished the costs grid and expanded on the list of factors, set out in Rule 57.01, which the Court may consider before making a cost award. Rule 57.01 was now expanded to include the principle of full indemnity and the reasonable expectations of an unsuccessful party to pay a cost award.

The principle of the reasonable expectations of an unsuccessful party to pay a cost award appears to provide the parties with some flexibility in obtaining the maximum cost award by permitting the successful party to establish the reasonable expectations of the unsuccessful party.  

Thanks for reading, and have a great day!

Rick

• Print
• Comments
• Trackbacks

As this is the beginning of the week, I would like to take this opportunity to visit two of the rules from the Rules of Civil Procedure, which are frequently used by estate litigators.

Rule 14.05(3)(a) states that "a proceeding may be brought by application where these rules authorize the commencement of a proceeding by application or where the relief claimed is, the opinion, advice or direction of the court on a question affecting the rights of a person in respect of the administration of the estate of a deceased person or the execution of a trust".  In contrast, Rule 75.06(1) states that "any person who appears to have a financial interest in an estate may apply for directions … as to the procedure for bringing any matter before the court".

It is clear from the language of these rules that an Applicant may use either rule to apply for directions from the court.  The difference between the two rules lies in the relief that the Applicant seeks. 

Rule 14.05(3)(a) is a substantive remedy that addresses the rights of a person with respect to the administration of an estate or the execution of a trust.  Therefore an Applicant who relies on Rule 14.05(3)(a), is asking the court to make a determination of his or her rights in the context of an estate.  For example, whether or not an Applicant has an interest under the deceased's Last  Will and Testament.

Rule 75.06(1) is a procedural remedy.  In essence, Rule 75.06(1) provides the road-map for "any matter before the court".  Therefore an Applicant who utilizes Rule 75.06(1) may seek a court order that permits the disclosure of relevant documents to their matter and establish time-lines for the completion of a specific phase in their court proceeding.  For example, the court may decide that mediation should be completed within 90 days and as such, include a mediation clause in a court order.

In summary, both rules can may be used to apply to the court for direction, however with Rule 14.05 (3)(a), the Applicant is asking the court for a specific answer to a question affecting his or her rights, whereas with Rule 75.06(1), the Applicant is requesting that the court provide them with a guideline to their court proceeding.

Have a Great Day!

Rick Bickhram

• Print
• Comments
• Trackbacks

Yesterday's Breakfast Series was very informative (and the breakfast is always a nice treat!).

Suzana Popovic-Montag started off the seminar with an instructive talk on trust issues in an estates context.  Her discussion of leading and recent case-law examining a trustee's discretion to encroach on capital, including Gisborne v. Gisborne (1877), 2 A.C. 300 (H.L.) and Fox v. Fox Estate, included the following observations:

• the Court will not interfere with the exercise of a trustee's discretion to encroach on capital in the absence of mala fides
• the term mala fides should be interpreted with some flexibility
• mala fides is more than just a category of fraud; it includes any act by an executor which is based on matters/considerations "extraneous" to the purposes of the testator
• the question as to the extent of a beneficiary's personal resources should, at first instance, be irrelevant

Suzana gleaned from her review of the authorities that the Court's overwhelming view seems to allow for the broad exercise of discretion on an unfettered basis (presuming the Will provides for it) and the Court will only reluctantly limit that discretion.

Craig Vander Zee followed with an interesting discussion on the removal and/or replacement of a trustee, and Ian Hull spoke about various estate law remedies applicable to estate administrations.  Their papers contain a thorough consideration of these topics that I unfortunately do not have sufficient space in this blog to touch upon.

Have a great weekend!

Natalia

• Print
• Comments
• Trackbacks

In Reviczky v. Meleknia, a house was "sold" (unbeknownst to the true owner) by a person acting under a fictitious power of attorney and posing as the applicant’s relative.  The purchaser, an innocent third party, financed most of the purchase price through a mortgage registered on title.  Although the purchaser conceded that he did not have good title, the bank that financed the transaction nonetheless took the position before the Court that its mortgage was valid.  

The lawyer representing the "vendor" sent a copy of the power of attorney to the lawyer acting for the buyer and the bank.  The power of attorney was dated just one month before the sale closed, the donor was over 88 years old and it was only witnessed by one person.  Both lawyers were unaware the document was forged. 

The solicitor for the buyer and the bank did not take any steps to learn about the form, content or validity of the forged power of attorney.   It was held that because the solicitor took no steps to scrutinize the document the bank’s mortgage was void.

It will be interesting to see how this case is applied.  I wonder if it will impact on a solicitor’s duties to “go behind” a power of attorney i.e. where a power of attorney has been signed recently and/or the donor is elderly, must a solicitor ask about the donor’s whereabouts, mental capacity at the time of signing, mental capacity at the time the power of attorney is being acted on etc.?

Thanks for reading,

Natalia

• Print
• Comments
• Trackbacks

An offer to settle made pursuant to Rule 49 of the Rules of Civil Procedure can be an extremely effective mechanism to secure a better costs order (see Rule 49.10).  Most offers made outside the ambit of the Rules can also be very helpful to the offeror from a costs standpoint, particularly if such offers (like Rule 49.10 offers) demonstrate that it would have been better for the recipient of the offer to have accepted it. 

However, a low ball offer made at the last minute may have little or no beneficial impact whatsoever.  In Volchuk Estate (Re), a contested passing of accounts application, where such an offer was made by the respondent, the court held that the offer did not have any influence on the quantum of costs that should be ordered to be paid. 

Several factors in discretion under Rule 57.01 that are to be considered by a court when making costs decisions will also likely impact on the quantum of a cost award.   In this case, for instance, the respondent was found not only to have failed to properly account for his activities as attorney for the deceased, but also to have misappropriated funds of the deceased during his lifetime.   While the principal amount of the Judgment against him was in the amount of approximately $40,000, the costs Order rendered exceeded $100,000. 

Thanks for reading,

Natalia

• Print
• Comments
• Trackbacks

• Print
• Comments
• Trackbacks

In guardianship disputes, unlike other estate litigation, you are dealing with a living person, whose needs and wishes must be kept in mind at all times.   For this reason, thorough contemplation of how to approach the case is important to undertake at the outset.

Felice Kirsh recommended some early considerations to keep in mind at the 10th Annual Estates and Trusts Summit, which include the following:

• Think before you start - A guardianship application is a drastic step. Even a consent application will be scrutinized by a judge and medical evidence will likely be required, as the court is trying to protect a vulnerable person who, in effect, is having his/her independence taken away.
• Representation of the incapable person - The incapable person is deemed to have capacity to retain and instruct counsel (section 3(1)(b) Substitute Decisions Act).  If this is not addressed at the outset by counsel, the court will often order representation for the incapable person prior to dealing with the substantive issues.
•  ADR Options - It may be possible to resolve a guardianship dispute (relating to a person over 18 years of age) by having him/her sign a new Power of Attorney.  Other means for resolving such disputes are for the parties to agree to attend a family meeting or mediation as early in the process as possible.

Given the cost and emotional nature of guardianship litigation, I hope these points provide helpful reminders of the caution that should be exercised in these matters. 

Have a good day,

Natalia

• Print
• Comments
• Trackbacks

Each year the Ontario Bar Association (OBA), Trusts and Estates Section, considers candidates for its Award of Excellence. Last year, the Section paid tribute to Brian Schnurr as the recipient.

The Award for Excellence was created to recognize exceptional contributions and achievements by members of the OBA to the area of trusts and estates.

Any Trusts and Estates Section member of the OBA in good standing, as well as former members of the section who have retired or been appointed to the bench, but not including current officers of the Executive of the Trusts and Estates Section or the Executive of the OBA, are eligible to be nominated.

The criteria for the award is demonstrated leadership in the trusts and estates bar through knowledge, experience, skill, commitment, passion and strength of character, plus all or some of the following:

• academic excellence through teaching at the Bar Admission Course, lecturing at a law school,    participating in Continuing Legal Education and/or academic writing;

• participation in the OBA Trusts and Estates Section Executive or the Law Society of Upper Canada on wills, trusts and estate matters; and

• contribution to the development of wills, trusts and estate law.

Any member of the Trusts and Estates Section of the OBA in good standing is eligible to nominate a candidate by submission in writing, together with a curriculum vitae outlining the nominee's qualifications. The nominator must indicate that the candidate has been advised of the nomination prior to the nomination deadline and has consented thereto. The Award is typically presented at the Section’s Annual Awards dinner in late Spring.

Nominations must be filed by 4:00 p.m. on Friday, January 25, 2007 to:

Peter Guennel, Sections Coordinator
Ontario Bar Association,
20 Toronto Street,
Suite 300,
Toronto, Ontario
M5C 2B8
Fax: 416-869-1390

For more information, and/or to obtain a Nomination Form, please contact Peter Guennel at (416) 869-1047, ext 340, or email at pguennel@oba.org or by visiting on line at http://www.oba.org/en/admin/awards_en/tru_award.aspx.

Thanks for reading.

Craig

• Print
• Comments
• Trackbacks

Interest is normally paid on the proceeds of a policy of life insurance thirty days after the insurer receives sufficient evidence of the claim. The requirements are mandated by statute. What happens, however, where the insured “disappears”, and the beneficiary brings an application for a declaration of death? Is interest payable from the date of death (as declared by the court), or from the date of the declaration itself?

This issue was considered by the Court of Appeal of Manitoba in Antonation v. Sylvester, 2007 MBCA 110 (CanLII). There, the “deceased” disappeared on May 29, 1998. In May 2005, the beneficiary under a policy of insurance on the deceased’s life brought an application for a declaration that the deceased was presumed dead because of the passage of seven years from his disappearance. The court granted an Order on July 4, 2005 declaring that the deceased “shall be presumed to have died on May 29, 1998.”

The proceeds of the insurance policy were paid to the beneficiary within 30 days of the date that the court made the declaration: July 4, 2005. However, the beneficiary claimed interest from the date of disappearance (ie. the date of death as declared by the court: May 29, 1998).

The Court below and the Court of Appeal both held that no interest was payable until 30 days after the date upon which the declaration of death was made. This declaration was part of the “sufficient evidence” that the insurer required in order to trigger the obligation to pay under the applicable legislation. Until this declaration was made by the court, there was no obligation on the part of the insurer to make the payment.

The legislation in Ontario is essentially similar to the applicable Manitoba legislation considered by the court. In fact, the Court of Appeal of Manitoba relied on an Ontario Divisional Court case directly on point.

Thank you for reading.

Paul Trudelle

• Print
• Comments
• Trackbacks

It seems with increasing environmental disasters, marked climate change and the media buzz resulting from the release of An Inconvenient Truth, that environmental consciousness has risen to an all-time high in North America.   While lots of us do our part at home i.e. by recycling, composting and unplugging unused electrical items, more could be done at the workplace. 

 

I found a write-up on this issue in this week’s Globe and Mail, which noted an astounding claim by GreenPrint Technologies (a company that sells software to eliminate unnecessary pages before printing), that Americans use enough sheets of paper each year to build a ten-foot high wall that would stretch from New York to Tokyo and beyond.  

 

Despite the 20^th Century predictions of a paperless office, it seems we are far from achieving that goal, particularly in the legal arena where people may be more fearful of relying solely on computer systems to store important documents, and where hard copies of file materials are often required to conduct our practice. 

 

I wonder whether a truly paperless office is realistic given the nature of our work.  Perhaps the best we can hope for is to significantly reduce our paper usage.  A start may be to send e-mails ending with a message along the lines of “Print only when necessary”, which environmentalists reportedly say have real value.   Other options are to cut down on extending e-mail trails and to avoid sending written communications in multiple forms.

 

Have a great weekend,

 

Natalia

• Print
• Comments
• Trackbacks

This is the title of an interesting article I read in Perspective (Fall 2007 issue) that reviews some steps and considerations that may help strike the right balance for your family when estate planning, which I have touched upon below.   

 

1. Talk about the future – ask your children how they see your estate being distributed, correct imperceptions and incorporate others, let them know you do not want a dispute over your estate, and be realistic.

 

2. Deal with differences – if your children have achieved different levels of monetary success, consider the following questions:

 

1. Have the opportunities been equal? Take this into account to avoid future resentments.

 

2. Are current circumstances beyond a beneficiary’s control? If an heir has a medical or physical infirmity you may wish to balance the amount gifted with other benefits they receive.  Think about creating a trust for a vulnerable person suffering from substance abuse or other addiction to ensure ongoing financial structure.

 

3. Are lifestyle choices a factor?  If you oppose a lifestyle choice, rather than exclude that person consider stipulations on the gift that could allow it to be used for purposes consistent with your family values.

 

4. What about your family business? If your goal is to maintain the family business and family harmony, one solution is to issue different classes of shares so there is equal ownership and those working in the business retain control.

 

3. Your Way – it is important that your family understand your thinking in order to avoid misunderstandings and potential litigation, which you can convey to them via a family meeting or a family letter with follow up discussion.

 

Have a good day,

 

Natalia

• Print
• Comments
• Trackbacks

The fifth annual Intensive Wills and Estates Workshop is coming up!  It was recently announced in the Osgoode Professional Development circular, and is touted as an interactive workshop designed for practitioners wanting to update their knowledge and hone their skills in estate planning and administration. 

Some of the things you will learn are:

· how to take more comprehensive instructions and notes

· techniques for substantiating capacity

· effective strategies for using a roadmap and checklist when drafting

· how to avoid negligence claims when executing a Will

· strategies to avoid or lessen probate fees and estate tax liabilities

· how to handle situations where a challenge to a Will is anticipated

· methods to protect yourself when acting as an estate solicitor in both testate and  intestate situations

· how to manage unusual applications for Certificates of Appointment

The workshop is being led by Jordan Atin, barrister & solicitor (and associate counsel to Hull & Hul